es Networks actively recruits and utilizes skilled foreign talent (MBA holders) mainly in Asia. On this occasion, we talked about the efforts taken up by Hitotsubashi University Business School, School of International Corporate Strategy (Hitotsubashi ICS) in training and turning out large numbers of highly-skilled foreign talent to help us to become a role model for future Japanese companies. We will introduce a dialogue between Professor Ken Kusunoki of Hitotsubashi ICS and Shintaro Suhara and Yoshinori Takabatake from our company, split into two parts: a first and second half.
At our business school Hitotsubashi ICS, we have an MBA program in place as an international school, with international students mainly from Asia who comprise 80 percent of the student body studying in Japan to acquire their MBAs; most of them go on to seek employment with Japanese companies. Amidst such circumstances, there are some wonderful companies who have taken on a lot of our MBA graduates, and es Networks is one such great company, as those in the know will tell you.
“Those in the know.” (laughs) Thank you very much.
First of all, could you explain briefly what kind of business is done by your company, es Networks?
I think you know very well professor, but the keyword is CFO. Our main customers are venture companies and small- and medium-sized companies in rural areas. These two sectors have very few CFOs, or in some cases almost none, and while they have good points, they’re suffering from the fact that their business activities aren’t sustainable, or maybe sustainable but not growing. This is where es Networks comes in, providing CFO functions as a corporation.
I see. Can I inquire as to the specific methods?
There are two methods: consulting and outsourcing. Under consulting we hire out our CFO expertise. With outsourcing, we handle the logistics that are governed by the CFO. Like this, thanks to you, we are able to do business.
In my understanding, I think that is very important for the growth of a company. After all, venture companies and SMEs in local areas tend to be concerned only with PL, but in order to grow a company it is necessary to approach management from a different timeline and different perspective than profit and loss (PL), which is the extension of the daily household account book known as finance. The CFO is responsible for that, but this doesn’t come about so easily. That’s why you provide that function and role from the outside.
Yes, that’s right.
Depending on the situation, the person serving the function of the CFO leaves.
Yes. They leave.
I think that some special features of your business are that the items covered are very clear, and at the same time the way you get involved with clients is very deep. What motivated you to hire highly skilled foreign workers with Japanese MBAs such as us?
While venture companies and local SMEs often can’t use balance sheets well and have trouble creating new business, one thing managers are vaguely thinking is that in a situation where the domestic demand of Japan is shrinking little by little, working only in the domestic market is a bit dangerous. If that’s the case, then we will look to Asia for real demand, or seek sections where Japanese labor costs can be transformed in Asia. Company presidents often have these kinds of thoughts. However, since there aren’t any concrete practical inroads with footholds there, about five or six years ago we started to put energy into serving as a bridge to help make that possible. So, one big reason is that there is real demand. Because our customers have a real demand for it, we want to build a bridge to Asia. That being so, we think that our customers will certainly be pleased to work together with people who know the laws, accounting, culture, and customs of the destinations to which they’re headed, people who can provide informed suggestions. This is an incredibly simple reason.
I see. I think that your company has already developed business with overseas bases, but which countries are your focus currently?
The first country we developed was Vietnam. In 2008 we expanded into Ho Chi Minh City, and after that into Hanoi.
This year will be its 10th anniversary.
That’s right. We also have Singapore and Thailand, and are currently considering the Philippines. However, in terms of customers who are having trouble getting started overseas, we also offer services in areas without bases, and have a record of achievement in places like San Francisco and Beijing.
How many foreigners have you hired up to now?
Of our 285 employees, about 70 are foreign, so the ratio is over 25%. However, the proportion of so-called highly-skilled foreign talent who can be introduced from like you, professor, is still not high. It started with 7-8 people and we’ve been increasing the number every year.
How many people have been recruited from Hitotsubashi ICS so far?
5 people including planned recruits.
Apart from those, do you have a lot of highly-skilled foreign workers?
I wouldn’t go so far as to say a lot, but over the past five or six years we’ve been recruiting locally overseas, and as we continue to strengthen our overseas presence, more and more the situation is becoming one where highly-skilled foreign talent is needed.
After recruitment, what kinds of activities are your highly-skilled foreign talent involved in?
Honestly, for the first 5-6 months after recruitment it is difficult to participate actively. So, first of all we have them go to a Japanese language school in order to study language and culture, and study onsite at customer projects that are currently in operation. Once they’re at the place where they “get it,” that’s when the difference of highly-skilled foreign talent comes into play. They are skilled from the beginning, and have a thorough knowledge of their respective countries, so we have them begin doing business consulting itself as is, or have them take active roles in work using English.
As a company do you support Japanese language studies?
Yes, basically we set up a period of 6 months solely for the concentrated study of Japanese. However, we think that just going to Japanese language school doesn’t provide sufficient stimulation, so for example we arrange their schedules so that they go to language school in the morning, and into the office in the afternoon. In addition, we have them learn specialized knowledge relating to business at our company intensively through lectures at the company for 2 months. These lectures are done in Japanese.
That way it functions as a course in business Japanese as well.
There is one wonderful talent among our graduates, whom you recruited. How was her Japanese when she entered the company?
She has improved markedly, but in the beginning, it wasn’t her strong point.
I see. So, apart from her linguistic strength, how was her adaptability and personality?
She is stationed at our Nagoya office, and first of all, she is incredibly friendly.
The members of our Nagoya office are the type of Japanese people who have probably never used English once at work, but with her amazing personality, she got used to them right away, and from that moment they respected her, saying things like, “This person is amazing, right?” and “Amazing! She’s unlike anyone I’ve ever met!”
Really? So, in an example of being useful in actual practical work, I heard that one of our graduates from Thailand was doing business in Thailand, and that it went really smoothly.
Yes, although investment-related consultation was done from the customer, it is of a different nature than the current work of our Thai corporation, and for us even if we understand how to handle it, the execution is difficult. However, when we asked him, he quickly contacted the local government agencies and such and told us the necessary information and solution to the issue.
I see. One big thing that I really want to do with Hitotsubashi ICS is inbound management talent. If for reasons like the ones mentioned by Suhara-san, Japan is expanding overseas due to actual overseas demand, I think that there are basically three ways to tackle management talent there. For example, in the case of expanding in Thailand as pattern A, a Japanese person knowledgeable about Thailand is in the company, and that person goes out when the company does business in Thailand. In pattern B, there isn’t that kind of person in Japan, so they set up a base on site, and hire a local person. Pattern C is having a Thai person in Japan, a person who loves and has a good understanding of Japan and is recruited there, and having that person go to Thailand on company business. No matter how I look at it, I think that C is a better option than A or B.
Not only inbound tourism, but inbound business talent should increase more and more from here out, and I think it would be great if we can open that gate with our MBA program. However, since this is something that the recruiting side isn’t used to, one might think that for example, in terms of recruitment standards, what’s necessary is not simply the ability to speak the language, but also a firm examination of recruits for the kind of adaptability and personality. Is this the kind of thing that you gradually come to understand as you go along?
That’s right. Words are in the end only a means to an end, and if you spend some time together and conduct an interview, you begin to get an understanding of the character of the person in the same way as if you were speaking to a Japanese person; “Ah, this person is this kind of person!” With other people who have entered the company as well, it is surprising how little a gap exists between the impression of their personality we get during the job interview and after they enter the company.
I see. Perhaps all the more in the case of foreigners, there may be cases where it is possible to see a more candid, unbiased sketch of their character.